FUTURE OF RAIL Summary of regulated outputs for CP5 Summary of CP5 effi cient expenditure assumptions
£2.119bn – Support £1.968bn – Operations £3.056bn – Traction electricity, industry costs and rates £5.166bn – Maintenance £1.058bn – Schedule 4
(compensation paid to TOCs for engineering possessions) = £13.367bn – Total operating expenditure £12.107bn – Renewals £12.818bn – Enhancements = £24.925bn – Total capital expenditure = £38.293bn – Total expenditure
Few and far between
In some areas Network Rail is doing some “very good quality” work, he said, but warned that good examples are too few and far between. “There is a long way to go on asset management
and is determined to be proportionate
and effective. The regulator aims to intervene only where necessary, leaving the running of the railway to the industry and giving them the space to use their expertise and innovation.
Price said he strongly believes the rail industry needs the freedom to innovate and deliver, but that the ORR must seek assurance that Network Rail is on track to deliver what it’s funded to do.
“The capabilities and resource are there and I am confi dent that Network Rail will do it.”
As the fi nal determination itself explains: “There is no doubt that this settlement represents a
sizeable challenge for
and planning.” (More on this on page 92) The determination
explains: “Network
Rail has signifi cantly reworked its policies, presenting them in a ten stage process, in
line with best practice as
recommended by the asset management independent reporter, AMCL. They show a step-change in quality and coverage. New policies have been developed in key areas and existing policies have been refi ned where previously mature (for example, track) or rewritten where known to be poor (as is the case for civil structures policy).
“The CP5 policies refl ect a further move towards the differentiation
the
company. And it is right that it should. But it is in everyone’s interest that Network Rail delivers this challenging determination and hence it includes checks and balances, which are designed to give Network Rail, and the industry, fl exibility to respond.
“While the overall output requirements
are demanding, we have provided some fl exibility. For example, we have set the output for
reducing disruption to passengers for
the end of the control period, so that Network Rail and the industry can decide the most sensible trajectory to reach that point, taking
into account the large investment programme.”
The indicators the ORR will be monitoring are the same as those they would expect Network Rail to have in place itself, and the company will be given increasing freedom once performance turns around and outputs get to the levels they must reach.
Better asset management and planning is key, along with increased collaboration. The potential for greater use of alliancing is there, Price added.
basis of risk. They also move towards a more targeted approach to asset management, renewing only those components that require renewal where this is believed to be the most cost effective whole life approach.
“Although Network Rail has made
signifi cant progress in the development and justifi cation of its asset policies we consider that some areas of weakness remain.
of asset interventions
depending on the asset’s criticality, and therefore better target expenditure on the
“Defi ciencies in Network Rail’s asset knowledge limit its ability to demonstrate that its policies are fully optimised.
“ Network Rail still does not have asset data knowledge of suffi cient quality, in particular relating to asset degradation.”
A more crowded network means that access is
complicated, but Network Rail be getting the basics right,
the conference. Financials
The Network Rail underspend was highlighted recently by the ORR, and has raised some concerns, but group fi nance director Patrick Butcher said the money would be spent in the next period instead.
But with a signifi cant backlog of renewals, Price commented: “Under-spending effi ciency when your customers suffer consequences. Spending the right amount in the right place will reduce delays and get costs down.”
is
not the
The fi nancial monitoring of
Network Rail is also changing. The determination document acknowledges that there have
been “strong
differences of view between ourselves and Network Rail on the extent to which the company has fi nancially
performed in CP4.
These have been caused by factors such as there being no shared view on the most appropriate
approach Above: Network Rail’s assessment of its asset policies to measuring
fi nancial performance, and how Network Rail provides evidence supporting its analysis given issues with data quality. We intend to put this on a fi rmer footing for CP5.”
FOR MORE INFORMATION
www.rail-reg.gov.uk/pr13/PDF/pr13-fi nal- determination.pdf
rail technology magazine Dec/Jan 14 | 45 Price
must told
Richard Price
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112